Created on 2016-03-26 18:27
Published on 2016-03-26 18:36
Pop Quiz! Without recourse to your text, your notes or a Google search, what line item is the largest asset in Uncle Sam’s financial accounts?
A) U.S. Official Reserve Assets
B) Total Mortgages
D) Student Loans
The correct answer, as of the latest quarterly data, is … Student Loans.
The rapid growth in student debt has been an ongoing topic in the financial press. A stunning chart that continues to haunt us illustrates the rapid growth in federal loans to students since the onset of the great recession. The chart is based on the Federal Reserve’s Financial Accounts data (available here) for government’s assets and liabilities.
Of course, assets are, sadly, the trivial side of Uncle Sam’s Financial Accounts balance sheet — about 1.98 Trillion. The liability side totaled 17.67 Trillion at the end of Q4.
The student loan bubble, the biggest slice in Uncle Sam’s asset pie, will haunt us for many years to come. Pulled from an article written by Doug Short 11MAR16